Make us your home page
Instagram

How to avoid holiday debt traps

CHICAGO — As the holiday shopping season expands and retailers make impulse buys ever easier via smartphones and otherwise, consumers have to be extra disciplined to avoid money trouble.

Unfortunately, many will take months to pay off the goodies they bought for loved ones or (shh) themselves at door-buster deals and other special offers.

Among the potential debt traps for the unwary this year:

• Some credit card issuers have mailed blank checks for their customers to use, just in time for the holiday shopping crush. Interest rates on these cash advances can run 20 percent or more if you don't pay off your card within the prescribed period.

• Card issuers increasingly are attaching spending requirements to generous rewards and bonus offers they dangle ahead of Black Friday, making you spend with their card in order to earn them.

This doesn't mean you have to shun all holiday sales in order to remain financially responsible.

Here are some tips to keep spending under control and debt, if any, to a minimum:

1

Have a plan

Make a list of who you're shopping for, what items you hope to find and how much you intend to spend on each person. Stick to it! Your plan should call for you to start your shopping online, at least to compare prices and look for deals before you head to the stores. Avoid impulse purchases. And don't wait until the last minute to start shopping; it's a sure prescription to spend more.

2

LIMIT CREDIT CARD USE

If you must use a credit card, put your charges on just one card — the one with the lowest rate if you carry a balance. Remove all other cards from your purse or wallet. Don't apply for store cards just to snag one-time discounts. The ideal approach is to not charge a single item unless you can repay in full when your next bill arrives. At least set a target date to zero out the balance before you run one up.

3

BEWARE OF SPECIAL CARD OFFERS

In addition to rewards and bonus deals, issuers are tempting consumers by offering incentives such as no-interest balance transfers, extra perks by meeting certain spending levels and increased cash back in specified categories. Resist the bait.

4

USE LAYAWAY

Take advantage of the resurgence of holiday layaway programs. Retailers from Kmart and Sears to Toys "R" Us and Walmart have lowered or waived fees this year that shoppers pay to participate in these interest-free, pay-over-time programs. With stores eager not to lose customers to the competition, debt-conscious consumers can snag gifts at attractive prices while not having to pay an extra fee just to avoid buying with their credit cards.

5

GET CREATIVE

Find it difficult to stick to a holiday spending budget? Give gift cards and make something personal to go with them. Or give experiences instead of "stuff" — perhaps a shared hike, nature outing or special home-cooked meal. Or volunteer together at a soup kitchen, homeless shelter or nursing home if your gift recipient doesn't want more material items, suggests Pamela Yellen, a financial services consultant and personal finance author. The gifts people remember the most, as she points, are often free.

How to avoid holiday debt traps 11/25/12 [Last modified: Sunday, November 25, 2012 3:30am]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. Massachusetts firm buys Tampa's Element apartment tower

    Real Estate

    TAMPA — Downtown Tampa's Element apartment tower sold this week to a Massachusetts-based real estate investment company that plans to upgrade the skyscraper's amenities and operate it long-term as a rental community.

    The Element apartment high-rise at 808 N Franklin St. in downtown Tampa has been sold to a Northland Investment Corp., a Massachusetts-based real estate investment company. JIM DAMASKE  |  Times
  2. New York town approves Legoland proposal

    News

    GOSHEN, N.Y. — New York is one step closer to a Lego dreamland. Goshen, a small town about fifty miles northwest of the Big Apple, has approved the site plan for a $500 million Legoland amusement park.

    A small New York town, Goshen approved the site plan for a $500 million Legoland amusement park. Legoland Florida is in Winter Haven. [Times file  photo]
  3. Jordan Park to get $20 million makeover and new senior housing

    Real Estate

    By WAVENEY ANN MOORE

    Times Staff Writer

    ST. PETERSBURG —The St. Petersburg Housing Authority, which bought back the troubled Jordan Park public housing complex this year, plans to spend about $20 million to improve the 237-unit property and construct a new three-story building for …

    Jordan Park, the historic public housing complex, is back in the hands of the St. Petersburg Housing Authority. The agency is working to improve the 237-unit complex. But the latest plan to build a new three-story building for seniors will mean 31 families have to find new homes. [LARA CERRI   |   Tampa Bay Times]
  4. Coming soon at two Tampa Bay area hospitals: a cancer treatment that could replace chemo

    Health

    A new cancer treatment that could eventually replace chemotherapy and bone marrow transplants — along with their debilitating side effects — soon will be offered at two of Tampa Bay's top-tier hospitals.

    Dr. Frederick Locke at Moffitt Cancer Center in Tampa is a principal investigator for an experimental therapy that retrains white blood cells in the body's immune system to fight cancer cells. The U.S. Food and Drug Administration approved these so-called "CAR-T" treatments for adults this month. In trials, 82 percent of cases responded well to the treatment, and 44 percent are still in remission at least eight months later, Locke said. [CHRIS URSO   |   Times]
  5. Regulator blasts Wells Fargo for deceptive auto insurance program

    Banking

    Wells Fargo engaged in unfair and deceptive practices, failed to properly manage risks and hasn't set aside enough money to pay back the customers it harmed, according to a confidential report by federal regulators.

    Wells Fargo engaged in unfair and deceptive practices, failed to properly manage risks and hasn't set aside enough money to pay back the customers it harmed, according to a confidential report by federal regulators.
[Photo by Spencer Platt/Getty Images, 2017]